Impacto de la estabilidad política e institucionalidad sobre la inversión extranjera directa: evidencia empírica para 145 países, periodo 2002-2019.

Abstract

This article analyzes the impact of political stability and institutionality on foreing direct investment (FDI) using information from 145 countries during the period 2002-2019. Institutionality is measured through a principal components index constructed from five variables obtained jointly with the political stability variable from the World Bank's "World Governance Indicators". Using the generalized method of moments (GMM) system estimator, the estimation results show the existence of a positive relationship between the variables of interest, such that when countries increase their perception of political stability and institutional framework, FDI increases. Similarly, when the sample is segmented according to income level, the results are maintained for the high and middle-income groups; without finding a positive or significant relationship for the low-income group. Therefore, it is concluded that governments should work to increase the political and institutional stability of their countries; this should be part of a consensus regardless of the group to which a country belongs since these factors play an important role in determining FDI and consequently have an impact on the long-term economic performance of a country